Pension Premiums

  • Maximum amount of pension contributions that qualify for tax relief is the greater of £3,600 or the individuals UK relevant earnings.
  • An annual allowance is set at £50,000 (2010/11 - £255,000) for the Pension Input Period ending in the tax year. Contributions in excess of the allowance are charged to tax at the top slice of income. Contributions also include those made by the employer.
  • Unused annual allowances of up to £50,000 can be carried forward for the next three years. When considering if there is any unused allowance from 2008/09, 2009/10 and 2010/11 the annual allowance for those years will be deemed to be £50,000.
  • Employer contributions need to be "wholly and exclusively" for the benefit of the trade to obtain tax relief.
  • Minimum age for taking benefits is 55. Was 50 Prior to 6 April 2010.
  • Maximum age for tax relief on contributions is 74.
  • Lifetime allowance is £1,800,000. The limit for 2012/13 has been announced at £1,500,000.
  • There is a tax charge of 55% on the excess value above the lifetime allowance if the excess if taken as a lump sum and 25% on monies retained.
  • Maximum tax-free lump sum is 25%.


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